Commercial Banking Interview Questions

What are the most common commercial banking interview questions?

We’ve asked countless commercial banking account managers, relationship managers, and credit analysts what the most common commercial banking interview questions are. Based on their responses and feedback we’ve laid out the most likely questions to be asked in an interview with a hiring manager.

We’ve organized the interview questions into two categories:

Technical (finance and accounting)

Behavioral (personality and relationships)

In this guide, we’ve also provided what we believe are the best answers to these commercial banking interview questions. For other careers, please check out all our interview guides.

#1 Technical commercial banking questions:

How would you determine the creditworthiness of a company?

There are two main approaches: (1) assets, and (2) cash flow. A thorough approach involves a full financial analysis of the business based on its financial statements, market conditions, and the management team.

On the asset approach, it’s important to understand how much the assets are truly worth, how liquid they are, and how much you think you could get for them. On the cash flow approach, the historical ability to generate cash flow (or net income, EBIT, EBITDA, etc.) will be relied on, in conjunction with a realistic forecast to assess how much debt they can service.

If you were asked to analyze a set of financial statements, what would you do?

The first thing I would do is put them in a clean Excel workbook, or company template, in an organized format. Next, I would calculate a variety of ratios based on: profitability, growth, margins, leverage, and liquidity (see question below for specific examples). Finally, I would analyze these ratios and identify trends (based on at least 3 years of historical information), which I would try to extrapolate into the future.

Where do you think interest rates are headed?

You have to be careful with your answer to this interview question. Every bank has their own economist, and every economist has 3 different outlooks on interest rates (up, down, and flat). The key is to simply demonstrate that, (1) you know what current interest rates are, and (2) you can identify some intelligent scenarios that would cause them to either go up or down. Avoid making a precise prediction, but show you’re informed.

If you were given an income statement where revenue was going up and net income was going down, what would you think the problem is?

There could be many issues, the most likely explanation is that the company is fueling its revenue growth by, (1) increasing its marketing expenses (see: return on ad spend), (2) decreasing prices, (3) experiencing an increase in cost of goods sold, or (4) changing accounting policies, like no longer capitalizing an expense that used to be. The main point is, more investigation into the income statement is required, but it’s often an indication that growth is being pursued in an uneconomic way (although that’s not definitively the case).

What’s more important, the income statement, balance sheet, or cash flow statement?

This is sort of a trick question, as three statements are extremely important and you can’t really get by with just one of them. The income statement is important to see what a company earns overtime and what it’s operating margins are like. The balance sheet shows what a company owns and what it owes. Finally, the cash flow statement shows how much actual cash the business is generating or consuming. All three are important together.

#2 Behavioral commercial banking questions:

How do you manage risk in your personal life?

This is an opportunity to show you can think on your feet, and apply the principles of risk management in a different way. There is no right or wrong answer. They key is to point out that there are various ways to think about risk (risk of loss, the risk of missing out, risk vs reward, etc). You could talk about your finances, or you could even talk about personal activities.

What does it take to be a great commercial banker?

This is a wide open interview question. There are lots of ways to answer it; the key is to think about the skillset required in commercial banking and tie your response to that. The main two skills required are, (1) analytics, and (2) sales/relationship management.

Where do you see yourself in 5 years, if you’re hired?

This is a sensitive topic. It’s likely to be one of the commercial banking interview questions because so many people try to go into it as a stepping stone, trying to get into corporate finance or investment banking, so it’s important not to make them think you want to leave in a few years. You want to come across as ambitious, but not too ambitious (i.e. don’t say in 5 years I see myself in your job).

Describe your approach to sales

You may or may not be asked a question along these lines, depending on what role you’re going for in commercial banking. A lot of commercial banking is sales oriented, so it’s important to be able to demonstrate you’ve got what it takes to thrive in a sales environment. There are many approaches to sales: relationship-based, need-based, value-based etc. There is lots of openness to this question.